Banking Chatbots in 2024: Benefits, Use Cases & Practices

Banking chatbots help customers complete transactions with ease using voice or text. Chatbots are useful to banks because they can reduce operational costs, as well as improve customer satisfaction by streamlining interactions.

However, this is an emerging technology, and banks are advised to deploy well-tested solutions to ensure that their reputation is not harmed by chatbot glitches.

In this article, we will explain in detail what banking chatbots are, what their benefits are to banks and customers, and how you can build functional banking chatbots.

What is a banking chatbot?

Banking chatbot, also called conversational banking (commerce), is the new era of digital service offering. In this era, AI driven virtual financial assistants, perceives and executes the banking transactions of customers. They can also provide opportunities to automate the relationship between the consumer and the bank. 

From the historical point of view, digitization of banks began with ATMs and then telephone banking. Evolution process has been followed by online and mobile banking, and now we are in the era of conversational commerce (see Figure 1).

We owe the advancements in conversational AI and rising mobile usage-apps to the conversational finance era. Since banking chatbots are becoming more sophisticated, which goes hand in hand with their popularity.

Figure 1: Evolution of digitized banking.

Figure 2: Intelligent virtual assistant manages customers’ queries.

To learn more about conversational commerce you can read our Top 5 Conversational Commerce Examples & Success Stories article.

Why are banking chatbots important now?

Automation provided by chatbots will be beneficial for banks:

• Chatbots are cost-efficient. Accenture research shows that 57% of companies agree that chatbots can result in large returns on investment with minimal effort.
• Demand for mobile banking is increasing across all age demographics. 24/7 available chatbots integrated to mobile applications can offer users immediate solutions to their urgent problems that they can not resolve via the app.
• Customers prefer messaging. Almost all mobile users are familiar with messaging apps such as Whatsapp, Telegram, Slack. Written and conversational communication over those applications is preferred especially by millennials. Banks are also testing using these popular messaging platforms for customer service.

Top 4 use cases of banking chatbots

1. Lead generation and qualification

Chatbots can engage with the visitors on the bank’s digital platforms to generate leads and assess those leads with relevant questions.

2. Customer service

24/7 availability, and the tireless and consistent nature of chatbots for customer support is an important advantage for chatbots in banking. 

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Salesforce Service Cloud Contact Center is a comprehensive customer service solution that enables organizations to manage their customer support operations and deliver good-quality customer experiences. Intelligent chatbots in the Contact Center provides personalized recommendations to the customers, automates answering customer questions and hands customers to the relevant agent.

3. Feedback Collection

Long feedback forms and surveys can be a nuisance to complete. A chatbot can engage customers with its natural language understanding and generation.

4. Personalized marketing strategies

Customers’ conversations with chatbots can be analyzed to personalize the bank’s messages for the customer.

Top 5 banking chatbot best practices

1. Understand the limitations and challenges of chatbot technology

A good analysis of the capabilities and limitations of existing AI-powered chatbot technology can set the right expectations and goals (see Figure 3).

Figure 3: Optimal chatbot strategy that maximizes customer satisfaction.

2. Review how to protect user data

Banking companies are responsible for protecting the information gathered by chatbots. Data security must be reliable for the chatbot. Since data leaks can harm a company’s brand and finances. To enhance your cybersecurity posture, you can read our cybersecurity best practices article.

3. Review how to secure transactions

Chatbots, especially those that focus on customer service, increase the attack surface. The transactions that they can complete, authentication procedures etc. need to be reviewed to ensure secure service

4. Build specialized chatbots

There are many use cases of banking chatbots from lead generation to customer service. Starting with a domain specific chatbot can simplify requirements which is critical in any technology project.

5. Test extensively

There are numerous cases of chatbot failure. Do not let your financial institutions’ conversational agent be a failure. Testing for edge cases can help minimize or prevent screenworthy failures of your company’s chatbot.

For more on chabots

For more on chatbots and AI in financial services, feel free to read these articles:

• Digital Transformation for Banking: In-Depth Guide
• Chatbots: In-depth Conversational Bots Guide
• 30+ Chatbot Usecases/Applications in Business

Finally, if you believe your business would benefit from adopting a chatbot platform, we have a data-driven list of vendors prepared. We will help you choose the best one for your business: